Vietnam economy forecast to be 17th-strongest in the world by 2025

Vietnam’s economy, which currently ranks 55th globally by GDP, will grow to rank 17 by 2025, predicts US investment house Goldman Sachs in a recently published forecast, saying that the country’s GDP will rise from currently $186 billion to $450 billion in just ten years.

One of the reasons cited for the strong upswing will be Vietnam’s membership in the Trans-Pacific-Partnership (TPP), a trade agreement between 12 Pacific Rim countries which will enable it to export goods with zero tariff rate to a broad market which currently accounts for two fifths of global trade. It is expected that when the TPP takes effect, Vietnam will likely witness a boom in exports of garments and footwear and, in turn, will see an increase in foreign direct investment, particularly from its former arch foe, the US.

Vietnam’s Industry Minister Vu Huy Hoang said that he expects the TPP to increase exports by $68 billion by 2025. Experts peg Vietnam as nation to benefit the most from the TPP.

As of late, Vietnam’s economy received a boost from lower energy costs. The nation’s central bank is also well situated in commencing more easing strategies in the event of an economic downturn. Vietnam’s central bank devalued the dong, strengthening exports and foreign investment.

Vietnam’s economy grew 6.3 per cent from January to September, the fastest rate since 2008, and the Asian Development Bank noted that Vietnam is set to become the fastest growing Southeast Asian country this year. The nation’s economic transformation has also had positive effects on poverty reduction, with extreme poverty seen to fall by 1 per cent by 2017.

Overall, the country is expected to post a 6.5 per cent GDP growth rate this year, the quickest pace in the five-year master plan of 2011-15 for economic development. Vietnam has also managed to achieve low inflation and a stable macro-economy in 2015, and expects GDP to grow by 6.7 per cent in 2016.

There are, however, remaining challenges such as an increasing number of businesses going bankrupt or dissolve, low labour productivity and still many unachieved eco-social development targets.

Vietnam’s economy, which currently ranks 55th globally by GDP, will grow to rank 17 by 2025, predicts US investment house Goldman Sachs in a recently published forecast, saying that the country’s GDP will rise from currently $186 billion to $450 billion in just ten years.

One of the reasons cited for the strong upswing will be Vietnam’s membership in the Trans-Pacific-Partnership (TPP), a trade agreement between 12 Pacific Rim countries which will enable it to export goods with zero tariff rate to a broad market which currently accounts for two fifths of global trade. It is expected that when the TPP takes effect, Vietnam will likely witness a boom in exports of garments and footwear and, in turn, will see an increase in foreign direct investment, particularly from its former arch foe, the US.

Vietnam’s Industry Minister Vu Huy Hoang said that he expects the TPP to increase exports by $68 billion by 2025. Experts peg Vietnam as nation to benefit the most from the TPP.

As of late, Vietnam’s economy received a boost from lower energy costs. The nation’s central bank is also well situated in commencing more easing strategies in the event of an economic downturn. Vietnam’s central bank devalued the dong, strengthening exports and foreign investment.

Vietnam’s economy grew 6.3 per cent from January to September, the fastest rate since 2008, and the Asian Development Bank noted that Vietnam is set to become the fastest growing Southeast Asian country this year. The nation’s economic transformation has also had positive effects on poverty reduction, with extreme poverty seen to fall by 1 per cent by 2017.

Overall, the country is expected to post a 6.5 per cent GDP growth rate this year, the quickest pace in the five-year master plan of 2011-15 for economic development. Vietnam has also managed to achieve low inflation and a stable macro-economy in 2015, and expects GDP to grow by 6.7 per cent in 2016.

There are, however, remaining challenges such as an increasing number of businesses going bankrupt or dissolve, low labour productivity and still many unachieved eco-social development targets.